Market highs

Is the Booming Legal Pot Industry a Good Investment?

This Colorado Firm Says Yes

DENVER, May 13, 2016 /PRNewswire/ — The cannabis industry has transformed from an “interesting curiosity” into a booming market.

With 30% annual growth and predictions of $6.7 billion in 2016 and $21.8 billion in 20201 (more than the NFL2), it’s the fastest growing industry in the US. According to The New York Times, “People [are] saying that legal marijuana is the next Internet, an untrammeled new market opportunity … waiting for its own big brands, the Google and Facebook of pot.” 3

“Businesses and Investors who throw their hat in the ring today have the potential to see strong returns on investment,” says Gary Graham, Executive Managing Director of Denver-based First Capital Ventures, which recently announced the formation of Viridis Fund I, LLC (the “Fund”), a closed-end private investment fund focused on the cannabis industry.

Window of Opportunity

“We spent months of due diligence and research, and saw an opportunity to create a platform where investors can capitalize on the ‘fastest growing industry in America,’4” says Graham.

“There is a critical window of opportunity with legal cannabis. In the current environment, even deserving deals are denied traditional financing, which means cannabis enterprises often pay investors premiums to obtain access to capital, including paying above-market interest on debt and lease rates. In addition, in this formative period of the industry, there is a shortage of business leadership, creating an opportunity to bring capital and management expertise to a market that otherwise presents significant deal risk for new investors.”

The Fund mitigates this risk by leveraging decades of financial, executive and entrepreneurial experience to identify the best management teams, strongest business plans and most disruptive solutions.

New Way to Invest

cannabis enterprises often pay investors premiums to obtain access to capital, including paying above-market interest on debt and lease rates

“There are other investment platforms participating in the industry,” says Chris Franz, Managing Director, “but we haven’t encountered an approach comparable to ours in financial discipline, collective expertise and agility.”

“Because of our first-mover position in the market, available capital and flexible approach, we cherry pick the best deals that have excellent management, compelling business models and efficient operations.”

The Tipping Point

“By focusing primarily on opportunities that don’t directly ‘touch the plant’ – i.e., real estate, equipment, technology and ancillary products and services,” says Graham, “We minimize registration and licensing requirements, reduce Federal exposure and manage related risks while maintaining the upside that makes cannabis so exciting.”

“With California poised to fully legalize in November,” says Franz, “the industry is nearing its tipping point—with the greatest potential returns available to those that enter ahead of the curve.”

“In 20 years, we believe investors are going to look back and think how incredible it was to get in on the ground floor.”




First Capital Ventures, LLC,
Founded in 2005, First Capital helps entrepreneurs realize their vision and growth potential by taking an active approach to business strategy, management and execution while driving shareholder value. Our team has 200+ years of combined business, management and finance expertise—starting, growing and financing early and mid-stage growth companies.
Disclaimer: This is not intended as an offer, a solicitation of an offer, or an advertisement for the sale of interests in the Fund. Any such offer or solicitation, if made, will only be made by means of appropriate disclosure documents delivered to qualified investors.
[1] The ArcView Group
[2] “Legal Marijuana Sales Could Hit $6.7 Billion in 2016,” Fortune, 2.1.2016
[3] Silicon Valley Tries to Alter Your Perception of Cannabis, 11.1.2016
[4] The ArcView Group